Western Price Survey
Week's End Edition
Although natural gas prices saw some gains during the trading week ending Jan. 14, Western electricity prices dipped by as much as $14/MWh.
According to the U.S. Energy Information Administration, a 138 Bcf draw from natural gas reserves provided a total of 2.959 Tcf in storage as of Friday, Jan. 7. The agency reports that this figure is significantly less than the 255 Bcf drawn for same period last year. Working gas stocks in the West are now 10 Bcf above the five-year average but 27 Bcf below year-ago levels, according to the agency.
Natural gas consumption in the U.S. increased by about 19 percent versus the previous week, according to the EIA's Jan. 12 natural gas update. However, prices remain lower than last year's due to continued strong domestic production.
Natural gas spot prices in the West were mixed, with some hubs losing value during the trading week. For the Friday-to-Friday trading period from Jan. 7 to Jan. 14, the average price for Southern California Border gas gained about 12 cents to reach $4.60/MMBtu. Meanwhile, PG&E CityGate gas lost 12 cents, trading for $4.54/MMBtu, and Malin average gas prices were down 20 cents, ending at $4.24/MMBtu.
The EIA's Short-Term Energy Outlook, released Jan. 11, included projections to 2012. This is the first time the agency has extended its forecast past the year ahead. The agency expects natural gas consumption to average 65.4 Bcf per day in 2011, and to rise 2 percent to 66.5 Bcf/d in 2012 thanks to increased demand for power generation and industrial use. Projected prices seem a bit shaky, with a predicted decline of 8 percent in the Henry Hub average spot price to $4.02/MMBtu in 2011, but the price should rebound the following year to $4.50/MMBtu.
As for electricity prices, in the Friday-to-Friday trading period spanning Jan. 7 to Jan. 14, Mid-Columbia peak power plummeted by almost $14.10, closing Friday at an average of $28/MWh. California-Oregon Border posted an $11.50 loss by Jan. 14, closing with an average of $31.74/MWh.
Palo Verde prices were down about $5.35 over the trading period ($33.95/MWh average on Friday), while South of Path 15 fell $4.40 to a $35.79/MWh average. North of Path 15 recorded no trades for daytime power Jan. 7 or Jan. 11, but the average peak price for NP15 on Friday, Jan. 14 was $35.80/MWh, down $4 over four days.
Off-peak power at Western hubs dropped over the trading period, with the most precipitous declines in the Northwest. By Friday, average prices for nighttime power ranged from about $23.60/MWh to roughly $27.15/MWh (see chart at left).
What's ahead: Starting Monday, Jan. 17, a rainy forecast continues for the Pacific Northwest, with showers expected to linger through Thursday. Seattle expects temperatures in the 40s during the week, while Portland temperatures should be in the upper 40s through Thursday. Dry and mild conditions are expected in the greater San Francisco area for the week of the 17th. The Los Angeles area should have temperatures on a par with seasonal norms; however, cooler conditions are expected starting late Wednesday [Linda Dailey Paulson].
* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.
Archives of the Western Price Survey for the past year are also available online.
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